If the cash rate is increased, the RBA is trying to:

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BlackTom AI · Accepted Answer

Here we examine what happens when the cash rate is increased and how the Reserve Bank of Australia (RBA) aims to influence the economy.
Option 1: 'all of the above' — This would be true if each of the other statements is accurate, since choosing 'all of the above' implies all listed effects occur. We will evaluate the other options to see if they are consistent.
Option 2: 'address excessive inflation in the economy' — A higher cash rate is a conventional tool to cool demand and help curb inflation. By raising borrowing costs, spending slows, which tends to reduce price pressures. This is a typical objective of tightening monetary policy.
Option 3: 'discourage credit-based spending' — Higher interest rates increase the cost of borrowing. This makes loans for households and businesses more expensive and can dampen credit-fueled spending, such as mortgages, consumer credit, and business investment. This aligns with the intent of rising the cash rate.
Option 4: 'reduce the demand for money in the economy' — When the cash rate rises, the opportunity cost of holding money (rather than earning interest by saving or investing) increases. As a result, people may choose to hold less money and instead put funds into interest-bearing assets or pay down debt, effectively reducing money demand.
In sum, each of Options 2, 3, and 4 describes a plausible effect of increasing the cash rate, and together they support the idea that the 'all of the above' option would be correct in this context. The reasoning reflects standard monetary policy transmission: higher rates curb inflation, restrain credit, and alter money demand by changing incentive structures around holding cash versus saving or spending.

If the cash rate is increased, the RBA is trying to:

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If the cash rate is increased, the RBA is trying to:

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类似问题

Which of the following agencies has primary responsibility for setting monetary policy and regulating the banking system?

Why is psychology important in a country’s monetary policy?

If the economy is producing an equilibrium real output that is less than potential output, a(n):

The RBA can stimulate the economy by _____, all of which shifts the aggregate demand to the _____.

Select the option that correctly shows all the missing words in the following sentence.Monetary policy is the management of ________ by changing money _______ for the purpose of adjusting aggregate _____.

Which of the following is NOT a Monetary policy tool available to the FED?

According to the graph, contractionary monetary policy will cause an economy that is initially at full-employment output to go from equilibrium _______ to equilibrium ________ in the short run.

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文献引用助手

课堂转译助手

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The RBA can stimulate the economy by _, all of which shifts the aggregate demand to the _.

Select the option that correctly shows all the missing words in the following sentence.Monetary policy is the management of ____ by changing money _ for the purpose of adjusting aggregate ___.

According to the graph, contractionary monetary policy will cause an economy that is initially at full-employment output to go from equilibrium _ to equilibrium __ in the short run.